Can we bring transparency to CU governance?

I’ve been used to the idea that all credit union data is available to the general public, thanks to the Freedom of Information Act, ever since I discovered the existence of the complete financial data for all of the approximately eight thousand federally-insured credit unions in the United States back in the year 2000.

This is a wonderful thing. This means that ANYONE, a member, a concerned citizen, a person looking to join a credit union, a vendor looking to sell his/her services, can instantly get a picture of any credit union’s financial condition. This is important to democracy, and is compatible with the democratic principles that this nation, as well as the credit union movement, are founded on.

But what I am shocked to discover is that the “higher” levels of the credit union system are not run with this type of transparency. And am thinking about two current examples.

Lack of transparency from the NCUA: On Will Magnus’ amazing tell-all blog, he reprints the Letter of Understanding that the NCUA is requiring Corporate Credit Unions to sign in order to get/renew share insurance. I don’t pretend to fully understand the ramifications of the agreement, but I was saddened to learn that the agreement included a clause to keep the contents of the agreement itself a secret because to make it public, would be “contrary to the public interest.” Excuse me? Who decided that one? I am appalled. I can’t figure out what information it contains that someone did not want to be public knowledge. Thank you, Will Magnus, for giving us the transparency that the NCUA does not want us to have.

Equally, if not more, galling is that CUNA has not so far not published the results of their survey asking credit unions if they are for or against trying to obtain TARP-money. Christian Mullins has done an excellent analysis of this TARP-survey, concluding that CUNA is trying to sway CUs toward pursuing TARP money. If CUNA operated in the open, honest and transparent manner that the Obama administration is embracing, they would publish the results of the survey for all to see and analyze. However, they’ve also given little thought to the method of their survey. It’s an open and random web survey (now closed) that anyone could fill out. This is rife with potential for abuse. There is no way to verify that anyone responding to the survey is really from the credit union they say they are from. People can vote multiple times and stuff the ballot box. And what if more than one person from a CU responds? What if the CEO votes one way, and the board votes another way? What if the MSRs are split? What if management pressures staff to vote a certain way? What if some CUs encourage their staff to vote, and other CUs remain ignorant that the survey exists? This poll was poorly designed and executed. The results, no matter how they come out, are tainted and unscientific. Now, where did CUNA publish those results again?

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5 Responses to “Can we bring transparency to CU governance?”

  1. Jeffry Pilcher Says:

    For organizations, politicians and individuals that shun transparency, the drivers are either arrogance, or guilt/shame. You “think you know better” or “the public can’t handle the truth.” Or you’ve got something to hide.

    Can anyone think of a good reason or a good time to keep things secret (military matters, state/trade secrets notwithstanding)?

    On a related note, aren’t we near the 50-year mark when the JFK assassination thing Johnson sealed-up will be released?

  2. Ginny Brady Says:

    Our CEO sat in on a second CUNA Webinar last week. She reported Dan Mica as saying that CUs should be pushing for TARP funds because the money is only available for a limited time. He implied that if we didn’t request it and get Treasury to change the rules so we could get it we’d be missing our chance to even the playing field with banks. CUNA’s mind is made up and they’re trying to make it look like this is a united front when, indeed, it is not.

  3. M.Shafer Says:

    The issue with Tarp is quite complex. I would be willing to bet that if you asked most credit unions if they would be willing to pay their fair share if the total price tag was guaranteed to be the $1.2 billion as has been discussed – most credit unions would probably be okay with this.

    What if the number balloons to $2, $4 or $6 billion? My guess is that a lot more credit unions would open their mind up to government (TARP) assistance. In fact I predict that credit unions would be SCREAMING for government assistance.

    Although I would prefer that we as an industry not have to use TARP I can understand why it is important to get credit unions at least to a point where we can utilize these funds if we absolutely have to.

  4. Jeffry Pilcher Says:

    Back to the question… Ummm, no.

    http://www.cutimes.com/news/2009/2/Pages/NCUA-Wont-Reveal-PIMCO-Methodology.aspx

  5. Jeffry Pilcher Says:

    CUNA seeks transparency on corporate plan

    http://www.cuna.org/newsnow/09/wash030109-1.html

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